COVID-19: Self-Employed Income Support Scheme
The government has now announced the outline of its support package to help self-employed individuals.
The information is still a little thin on the ground but the key points are:
- The scheme offers self-employed individuals a taxable grant worth 80% of their monthly income, capped at £2,500 per month.
- The individual’s income will be calculated by taking the average of their income over the last three years (or shorter period if they have been in business for less time than that).
- A self-employed individual does not need to give up work to be eligible for the grant. They can claim a grant and continue to do business (this is different to the situation with Employees and Furlough Leave).
- The individual must have trading profits of less than £50,000 per year to be eligible. This, according to the government, covers 95% of self-employed people.
- The individual must earn the majority of their income from their self-employed work to be eligible. So, if an individual has a job and earns a bit on the side from their self-employed work then they will not be eligible for the grant.
- The scheme is only open to those who submitted a tax return for 2019, which was due by 31 January 2020. This, presumably is to minimise fraud. However, if an individual missed the 31 January 2020 deadline, they can submit a tax return within 4 weeks from the date of the announcement on 26 March 2020 and still be eligible for the scheme.
- The HMRC will contact eligible self-employed individuals so they do not need to take any steps at this stage.
- The scheme will be open for at least 3 months, but it is unlikely to be running before the end of June. As such, it is not going to help cash flow in the short term for those unable to work now.